US Dollar Technical Forecast: DXY Turn & Burn Range- Breakout Levels

2022-03-31 15:30:00

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US Dollar Technical Price Outlook: DXY Weekly Trade Levels
US Dollar Index Price Chart – DXY Weekly
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Previous Weekly Technical Charts

US Dollar Technical Price Outlook: DXY Weekly Trade Levels

US Dollar technical trade level update – Weekly Chart
USD threatens outside-weekly reversal off resistance- range breakout in focus
DXYsupport 97.59, 97.21, 96.45(bullish invalidation) – Resistance 99.33(critical), 100.04

The US Dollar Index is down more than 0.6% this week with DXY whiplashing within a massive multi-week range. While the broader outlook remains constructive, the broader USD breakout may be vulnerable while below key technical resistance and we’re looking for a breakout to offer guidance heading into the April open with NFPs on tap. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of thisDXY technical setup and more.

US Dollar Index Price Chart – DXY Weekly

Chart Prepared by Michael Boutros, Technical Strategist; US Dollar Index on Tradingview

Notes: In my last US Dollar Weekly Price Outlook we noted that DXY was testing confluent resistance near 97.70 and that, “losses should be limited to 96.67 IF price is heading higher on this stretch with close above 97.72 needed to mark resumption of the broader uptrend in the Dollar.” The index ripped through two-days later with DXY surging more than 2.8% off the monthly lows. The rally extending into the next confluent resistance zone at the February 2020 high-week close (99.33) before reversing sharply – price has been ranging below this threshold for the past four-weeks.

Weekly support rests at 97.58/69- a region defined by the 38.2% retracement of the year-to-date range and the 2018 swing highs. A break / close below this threshold would be needed to suggest a larger correction is underway with subsequent support objectives eyed at the January high (97.21) and the 61.8% Fibonacci retracement at 96.45- a region of interest for possible downside exhaustion IF reached. A breach higher from here keeps the focus on the 78.6% retracement of the 2020 decline at 100.04- look for a larger reaction there for guidance IF reached.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: The US Dollar breakout has stalled into uptrend resistance with a multi-week range now in focus. As it stands, price is set to mark an outside-weekly reversal encompassing the entire range- watch the close. From at trading standpoint, the focus is on a breakout with the broader rally vulnerable while below 99.33- ultimately a larger pullback may offer more favorable opportunities closer to trend support. Keep in mind we head into the April open tomorrow with US Non-Farm Payrolls on tap- stay nimble! I’ll publish and updated US Dollar Price Outlook once we get further clarity on the near-term DXY technical trade levels.